Alaska Air Q3 swings to net loss on higher fuel costs

By Reuters News


Overview

  • US airline's Q3 revenue rose 14% yr/yr, driven by premium and loyalty growth

  • Company posted Q3 net loss due to elevated fuel costs

  • Announced intent to join Atlantic and Pacific Joint International Businesses with oneworld partners


Outlook

  • Alaska Air expects Q4 capacity to grow 1% to 1.5% year-over-year

  • Company sees Q4 unit revenue up low double digits year-over-year

  • Alaska Air forecasts Q4 adjusted loss per share of $2.50 to $2.00


Result Drivers

  • ELEVATED FUEL COSTS - Co said higher fuel prices drove Q3 net loss and reduced profitability

  • PREMIUM AND LOYALTY GROWTH - Premium revenue grew 25% and loyalty program cash remuneration rose 21% yr/yr, contributing to revenue growth

  • INTERNATIONAL EXPANSION - Co expanded international network with new routes to Paris, Athens, Osaka and Papeete, supporting capacity and revenue growth


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Total Operating Revenue

$4.31 bln

Q3 Adjusted Loss Per Share Excluding Tax Impact

$0.36

Q3 Loss Per Share

$1.32


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 16 "strong buy" or "buy", 1 "hold" and 1 "sell" or "strong sell"

  • The average consensus recommendation for the airlines peer group is "buy"

  • Wall Street's median 12-month price target for Alaska Air Group Inc is $51.00, about 48.4% above its October 20 closing price of $34.36

  • The stock recently traded at 23 times the next 12-month earnings vs. a P/E of 19 three months ago


Reuters Recommended Reads

  • Oct 20 - Alaska Air forecasts bigger-than-expected fourth-quarter loss on soaring fuel costs

  • Oct 20 - United Airlines profit outlook well below estimates, hit by fuel costs

  • Oct 20 - LATAM says capacity growth tracking to lower end of guidance as fuel stays high


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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